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In the US State I live in, I sometimes hear Spanish speakers greet one another by simply staying "Bueno". I didn't hear this when I was recently in Mexico, although I realize I may just have not noticed it.

How or when is "bueno" used as a greeting? Is it considered slang, and what are some considerations in its use?

Is it used a greeting in Spanish in other places beyond my lone state in the US?

Actually, ¿bueno? is used mostly in México and it doesn't originally represents a greeting or a hello. Around 1800 the telephone first came to México but the service quality was very poor. When somebody tried to call to another person then the operator person would have to connect that call, as the system was very poor then the operator person had to do some "test" in order to check whether the call can be connected or not. So, in order to know that, the operator person would say "¿Bueno?", which literally means "good?" and then wait for the answer, if it was "Bueno" then the call was successfully connected and the actual call proceeded.
Here is the source of this information, but it's in spanish
http://mx.noticias.yahoo.com/blogs/blognoticias/por-qu%C3%A9-se-dice--bueno--230425941.html

That's true, I researched about it and found that it was between 1879 and 1880 when it was first established in México
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Jose MariaOct 23 '13 at 1:10

It seems to me that this is folk etymology. Are there any contemporary sources that back this «¿bueno?» claim? -- while not used exclusively as salutation bueno is a common pet word in most Spanish speaking countries.
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Carlos Eugenio Thompson PinzónOct 24 '13 at 1:42

In Spain, at least in the Basque Country, it is sometimes used as a very informal "good bye", or "see you". Something like "bueno, entonces hasta mañana", and then dropping everything but "bueno". I've even heard it (and probably said it) reduced to "bo".

Here in Puerto Rico we frequently say "Buenas" ("Greetings") when answering phones and greeting people. When we conclude a phone call call or visit, we frequently say "Buen Día", as in "Have a good day".